Lorenzen, Bishop, Stober and Concerned Citizens of Lebanon County v. West Cornwall Township Zoning Hearing Board v. Sunoco Pipeline, L.P. No. 2015-02106

Civil Action-Administrative Law-Land Use-Zoning-Natural Gas Liquids Pipeline-Definition of Public Utility-Exemption from Local Zoning Ordinances-Public Service-Public Concern Characteristics

Appellants filed an appeal to the West Cornwall Township Zoning Hearing Board (“Zoning Hearing Board”) to the issuance of a permit by the Lebanon County Planning Department to Sunoco Pipeline, L.P., (“Sunoco”) allowing the erection of two (2) structures on property owned by Sunoco, structures that were erected eight (8) months before the issuance of the permit in question, to serve as pump stations for pressurization of natural gas liquids to transport natural gas liquids in a proposed existing, repurposed pipeline owned by Sunoco known as the Mariner East Pipeline project. Appellants argued that Sunoco had not established that it is a public utility corporation and/or that the use of the pipeline constitutes a public utility service such that it was not entitled to exemption from complying with West Cornwall Township Ordinances pursuant to West Cornwall Township Zoning Ordinance § 27-1722. Sunoco lodged a Motion to Dismiss the appeal on the basis that Appellants lacked standing to contest the issuance of the permit. West Cornwall Township Zoning Hearing Board found that Appellants lacked standing to contest the issuance of the permit, holding that Appellants had not shown that the harm posed to them was greater than that posed to other citizens. In rendering that holding, the Zoning Hearing Board acted under the assumption that Sunoco was a public utility entitled to exemption from § 27-1722 and considered the impact only of the presence of the two (2) structures on the site, not the actual intended underlying use.

1. In cases where the trial court takes no additional evidence in a zoning case, the court’s scope of review is whether the zoning hearing board committed an abuse of discretion or an error of law. An abuse of discretion occurs when the findings of the zoning hearing board are not supported by substantial evidence. Substantial evidence is relevant evidence that a reasonable mind would accept as adequate to support the conclusion reached.

2. Public utilities subject to local zoning regulations in the absence of some special provision to the contrary.

3. However, it has been said that public utilities should enjoy a favored status with regard to the application of local land use regulations and that property used by public utilities may be exempt from provisions of zoning regulations by express provision of statute or ordinance.

4. The definition of “public utility” or “public service corporation” controlling under other statutes is not dispositive of the question of whether a business is a public utility for purposes of exemption from local zoning ordinances. Rather, the determination of whether an entity is a public utility for purposes of exemption from a local zoning ordinance requires consideration of several factors relating to the public service and the public concern characteristics of the public utility including the goods or services provided, competition in the local marketplace and the existence and the degree of regulation by governmental authority.

5. When a zoning ordinance fails to define the term “public utility,” the term is understood to mean any business activity regulated by a government agency in which business is required by law: (1) to serve all members of the public upon reasonable request; (2) to charge just and reasonable rates subject to review by a regulatory body; (3) to file tariffs specifying all of its charges; and (4) to modify or to discontinue its service only with the approval of the regulatory agency.

6. The Court’s review of whether Sunoco constitutes a public utility exempt from the requirements of local zoning ordinances pursuant to West Cornwall Township Ordinance § 27-1722 was hindered by the Zoning Hearing Board’s failure to take evidence and to consider relevant factors necessary to the establishment of the same. As a result, there was no way to determine whether the Zoning Hearing Board’s finding that Sunoco is a public utility for zoning purposes was based upon substantial evidence necessitating remand for further proceedings.

L.C.C.C.P. No. 2015-02106, Opinion by John C. Tylwalk, President Judge, November 21, 2016.

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

CIVIL DIVISION NO. 2015-02106

DOUG LORENZEN, PAMELA BISHOP, PHILLIP J. STOBER, and CONCERNED CITIZENS OF LEBANON COUNTY, Appellants

v.

WEST CORNWALL TOWNSHIP ZONING HEARING BOARD, Appellee

v.

SUNOCO PIPELINE, L.P., Intervenor

APPEARANCES:

J. DWIGHT YODER, ESQUIRE, GIBBEL, KRAYBILL & HESS, LLP, FOR DOUG LORENZEN, PAMELA BISHOP, PHILLIP J. STOBER, and CONCERNED CITIZENS OF LEBANON COUNTY

KEITH KILGORE, ESQUIRE, SPITLER & KILGORE, FOR WEST CORNWALL TOWNSHIP ZONING HEARING BOARD

HELEN GEMILL, ESQUIRE, MCNESS WALLACE & NURICK, LLC FOR SUNOCO PIPELINE, L.P.

OPINION, TYLWALK, P.J., NOVEMBER 21, 2016.

Appellants Doug Lorenzen, Pamela Bishop, and Phillip J. Stober, are residents of West Cornwall Township (“the Township”) and Appellant Concerned Citizens of Lebanon County (“Concerned Citizens”) is an unincorporated association with a Township mailing address. Its membership consists of a number of Township residents. On June 5, 2015, Appellants filed this land use appeal from the Decision of the Zoning Hearing Board of West Cornwall Township (“the Board”) which was issued on October 27, 2015 pursuant to Section 11001-A of the Municipalities Planning Code,.

The Mariner East Pipeline Project is an undertaking by Intervenor Sunoco Pipeline L.P. (“Sunoco”) for the utilization of three hundred miles of existing pipeline, constructed in the 1930’s, for transporting natural gas liquids (“NGLs”) across the state of Pennsylvania. Through the use of the pipeline, Sunoco proposes to replace east-to-west flowing gasoline with west-to-east flowing NGLs. The NGLs must be highly pressurized to stay in a liquid state, which has required Sunoco to construct pump stations throughout the route to pressurize the pipeline. Sunoco is the owner of property at 370 Horseshoe Pike in West Cornwall Township (“the site”) where a portion of the Mariner East Pipeline Project and improvements related to the pipeline are located.

On May 7, 2015, Sunoco applied for and was issued Permit No. 7-15 by the Lebanon County Planning Department (“Planning Department”) on behalf of the Township. This permit allowed two new structures, described as “unmanned accessory support and maintenance structures, under Section 27-1722 Public Utilities Exemption,” to be erected at the site, which is located on 14.17 acres in the Township’s M-Manufacturing District.

West Cornwall Township Zoning Ordinance, §27-1722 provides:

For the purposes of this Chapter, public utilities exemptions to district requirements shall extend only to accessory support and maintenance structures and buildings not requiring human occupancy. Such uses and structures including fences shall be located no closer than 10 feet to any lot line or road right-of-way line. Principal utility structures (e.g., sewage treatment plants, electrical power plants, etc.) shall be permitted in any district but shall comply in all respects with the requirements for a principal use of the district in which it will be located. In either case, said utility corporation shall secure a building and zoning permit from the Zoning officer prior to the start of construction. Said permit application shall include any and all approvals required by other agencies, etc., for the use specified.

(Ord. 93, 9/8/97, §17.22).

The permit allows two proposed uses at the site – a 14 by 52 by 35-foot power distribution center enclosure and a 35 by 50 by 35-foot pump equipment enclosure. These structures were actually erected in September 2014, eight months prior to the issuance of the permit.

Sunoco had previously been issued another permit for the site. Appellants had also appealed the issuance of that permit, arguing that Sunoco was required to obtain conditional use approval. A week prior to the hearing scheduled for that appeal, Sunoco surrendered the permits. Although the Planning Department refused to accept the surrendered permits, the Board ruled that Appellants’ appeal was moot. Sunoco did not raise the issue of Appellants’ standing during those proceedings.

On June 5, 2015, Appellants filed an appeal to the issuance of Permit 7-15 to the Board. Appellants argued that Sunoco was not entitled to exempt status under Section 27-1722 of the Ordinance because it did not establish that it is a public utility corporation and/or that the use of the Mariner East I pipeline constitutes a public utility service. Appellants reasoned that Sunoco was therefore required to obtain conditional use approval for its project. Appellants further argued that the Township had erred in failing to review the potential impact and dangers associated with the buildings and the uses at the Sunoco site.

The Board conducted a hearing on the appeal on September 15, 2015. At the inception of the hearing, Sunoco contested Appellants’ standing. As a result, the Board permitted Sunoco to voir dire various witnesses, Pamela Bishop, Doug Lorenzen, and Marcia Stober (sister of Appellant Phillip Stober), on this issue. The testimony of these individuals focused on their proximity to the site, noise and vibrations from the pump station, and the danger of a possible explosion to themselves and others in the Concerned Citizens group.

The Board also permitted Appellants to present the testimony of Rich Raiders, an environmental/petroleum engineer who was accepted as an expert with regard to safety, environmental, and other risks pertaining to pipelines, pump stations and accessory structures of the transmission of NGLs. Raiders explained the potential dangers and the impact that the pumping station has on the area surrounding the site. He described the possible dangers which could occur in the event of one NGL, butane, pooling as a liquid inside of the pump station enclosure, noting that such a situation could lead to a boiling liquid evaporating cloud explosion which could impact properties two to three miles away from the site. He further explained that other NGLs, ethane and propane, have the potential to explode in their vapor form, causing trees in the wooded area surrounding the site to become projectiles or to provide fuel for a fire. Raiders also noted specific safety concerns for landowners in the quarter-mile to half-mile range with regard to objects, such as roofs or the components of the enclosures, landing in yards. He also noted that damage to residences, such as windows blowing out, could occur within three miles of any explosion. Raiders also described the problems caused by explosions connected to other pipelines which caused firestorms, evacuations, and destruction of homes. Sunoco presented no witnesses at the hearing.

After finding that the concerns expressed by Appellants were the same as those of the general public, the Board granted Sunoco’s motion to dismiss the appeal for lack of standing at the hearing and took no further testimony. On October 27, 2015, the Board issued its written Decision with findings of fact and conclusions of law. In reaching its conclusion, the Board considered the testimony of Bishop, Lorenzen, and Marsha Stober and made findings as to the effects the structures on the site would have on their respective properties and those of the group comprising the Concerned Citizens, but did not mention Raiders’ testimony.

Appellants now seek review of the Board’s decision by this Court. The record of this matter has been provided to us for our review and we have taken no additional evidence. Appellants, the Board, and Sunoco all submitted Briefs in support of their respective positions and participated in Oral Argument. The matter is now before us for resolution.

In a case where the trial court takes no additional evidence in a zoning case, the scope of review is whether the zoning hearing board committed an abuse of discretion or an error of law. Ruprecht v. Zoning Hearing Board of Hampton Township, 680 A.2d 1214 (Pa. Commw. 1996), appeal denied 699 A.2d 737 (Pa. 1997). An abuse of discretion is present when the zoning board’s findings are not supported by substantial evidence. Bernie Enter v. Hilltown Township Zoning Hearing Board, 657 A.2d 1364 (Pa. Commw. 1995), allocator denied 666 A.2d 1058 (Pa. 1995). Substantial evidence is that relevant evidence which a reasonable mind would accept as adequate to support the conclusion reached. Greth Dev. Group, Inc. v. Zoning Hearing Board, 918 A.2d 181, 185, n. 4 (Pa. Commw. 2007). Substantial evidence exists when a board issues an opinion which sets forth the essential findings of fact and sufficiently shows that the board’s action was reasoned rather than arbitrary. Lando v. Springettsbury Township Zoning Hearing Board of Adjustment, 286 A.2d 924 (Pa. Commw. 1972). If a board’s decision is legally sound and supported by substantial evidence, it will be upheld. D’Amato v. Zoning Board of Adjustment of City of Philadelphia, 585 A.2d 580 (Pa. Commw. 1991).

With regard to the determination of whether one is a party before a zoning hearing board, the Municipalities Planning Code (“MPC”), at 53 P.S. §10908(3), provides:

(3) The parties to the hearing shall be the municipality, any person affected by the application who has made timely appearance of record before the board, and any other person including civic or community organizations permitted to appear by the board. The board shall have power to require that all persons who wish to be considered parties enter appearances in writing on forms provided by the board for that purpose.

53 P.S. §10908(3).

In finding that Appellants in this case lacked standing, the Board relied on the following language from Armstead v. Zoning Board of Adjustment of City of Philadelphia, 115 A.3d 390 (Pa. Commw. 2015):

In order for an appellant to have standing to appeal a determination of the ZBA, they must demonstrate that they are an “aggrieved person.” For a party to be “aggrieved,” the party must “show an interest that is substantial, direct, and immediate.” For an interest to qualify as “substantial, there must be some discernible effect on some interest other than the abstract interest all citizens have in the outcome of [the] proceedings.” (noting that “it is not sufficient for the person claiming to be ‘aggrieved’ to assert the common interest of all citizens in procuring obedience to the law”). An interest is direct where the party demonstrates “some causation of harm to his interest.” In order for an interest to be considered “immediate, there must be a causal connection between the action complained of and the injury to the person challenging it.” Therefore, to meet the three requirements for an aggrieved party, the party must demonstrate that the challenged action personally harms his or her interest in a way that is greater than that of another citizen.

…

In the instant case, in accordance with all the Spahn cases, the nine individual Objectors have not demonstrated that they are aggrieved by Applicant’s proposed sign. First, although an objector may demonstrate standing based on the proximity of his or her residence to the subject property, none of the Objectors in this case are adjoining property owners or live in the immediate vicinity of the proposed sign. Based on the record, the closest Objector lives one and a half blocks from the proposed sign,; however, under the Spahn cases, in which an objector lived within one and a half blocks of a property and did not have standing, an objector does not have standing merely because he or she lives within one and a half blocks of a property. Thus, none of the Objectors have standing based solely on living in the immediate vicinity of the proposed sign.

Second, none of the individual Objectors have standing based on a “particular harm” resulting from the proposed sign. At the ZBA hearing, none of the nine individual Objectors testified that they will be able to see the proposed sign from the windows of their homes, and only one of the individual Objectors, Jovida Hill, testified that she will be able to see the proposed sign from the front stoop of her home. Hill, who lives a block and a half from the proposed sign, stated that the illumination of the proposed sign “will make all the difference in the world.” However, Hill did not explain how illuminating the proposed sign would cause her injury or to what extent its illumination will affect her. Because Hill does not live within the immediate vicinity of the proposed sign and has not asserted any particular harm resulting from the proposed sign, she has not established standing, under SCRUB, to challenge the ZBA’s decision. As for the other eight individual Objectors, they also did not testify about how they would suffer a particular injury from the proposed sign. Although Objectors argue that the individual Objectors are aggrieved because they use the park across from the proposed sign and frequently walk by the Property, this interest is the same as the objector in Spahn, which the Supreme Court determined is “no different from the abstract interest” of all other citizens. Thus, because the individual Objectors were unable to demonstrate an interest in the outcome of the proposed sign that was “substantial, direct and immediate,” they are not aggrieved parties and do not have standing to pursue this appeal.

115 A.3d at 396-398.

The Board found that neither the individual Appellants nor the Concerned Citizens organization had shown that the harm posed to them was greater than that of other citizens, noting the following: none of them were adjoining property owners or lived in the immediate vicinity of the structures, none could see the site from their property, there was no increase in traffic or noise as a result of the structures, and there was no testimony that they would suffer any particular injury or a substantial, direct, or immediate harm from the construction of the two structures. In making this determination, the Board acted upon the assumption that Sunoco was a public utility entitled to the claimed exemption and therefore considered the impact of only the presence of the two structures on the site with total disregard to the underlying use.

With regard to the applicability of local zoning ordinances to public utilities:

In the absence of some special provision to the contrary, public utilities are subject to local zoning regulations. However, it has been said that public utilities should enjoy a “favored” status when it comes to the application of local land use regulations, and by express provision of statute or ordinance, property used by public utilities may be exempt from the provisions of zoning regulations. The definition of “public utility” or “public service corporation” which is controlling under other statutes does not necessarily apply under a provision relating to zoning, and the fact that a business is regulated by a governmental body, including a public utilities commission, is not dispositive of the question of whether that business is a “public utility” for the purpose of exemption from local zoning restrictions. The determination of whether an entity is a public utility for such purpose requires consideration of several factors relating to the “public service” and “public concern” characteristics of the public utility, including the goods or services provided, competition in the local marketplace, and the existence and degree of regulation by governmental authority. …

101A C.J.S. Zoning and Land Planning §110.

In Pennsylvania, when zoning ordinances fail to define the term “public utilities,” the term is understood to mean any business activity regulated by a government agency in which business is required by law to (1) serve all members of the public upon reasonable request, (2) charge just and reasonable rates subject to review by a regulatory body, (3) file tariffs specifying all of its charges, and (4) modify or discontinue its service only with approval of the regulatory agency. Crown Communications v. Zoning Hearing Board of the Borough of Glenfield, 705 A.2d 427 (Pa. 1997).

We are mindful that In re Sunoco Pipeline L.I., 143 A.3d 1000 (Pa. Commw. 2016), the Commonwealth Court found that, with regard to the portion of the project known as the Mariner 2 pipeline phase of the Mariner East project, Sunoco is a public utility entitled to exercise eminent domain, a power granted to “public utility corporations” under the Business Corporation Law, 15 Pa.C.S.A. §1511 (“BCL”). In that case, the Court reviewed the trial court’s overruling of preliminary objections raised by condemnees whose land was subject to a declaration of taking filed by Sunoco for the construction of the Mainer 2 pipeline. The trial court had overruled the preliminary objections.

On appeal, the Commonwealth Court noted the BCL’s definition of “public utility corporation” as “any domestic or foreign corporation for profit that … is subject to regulation as a public utility by the PUC or an officer or agency of the United States.…” 15 Pa.C.S.A. §1103. It further noted that an entity must also possess a certificate of public convenience in order to exercise the power of eminent domain under the Public Utility Code, 66 Pa.C.S.A. §1104. In considering whether Sunoco was a public utility with the power of eminent domain, it noted that the PUC’s jurisdiction applies to intrastate movements of petroleum products. Noting that Sunoco had been certificated in Pennsylvania for many years, the Commonwealth Court commented that the grant of the CPC was prima facie evidence of public utility status under the Public Utility Code. The Court based its decision on its findings that that Sunoco was involved in intrastate shipments, that both Mariner 1 and 2 phases had been certified as a public utility service, and had filed and received PUC approval of multiple tariffs applicable to Sunoco’s intrastate service through the Mariner East Project, including the use of Mariner East 2. The Commonwealth Court affirmed the trial court’s decision, agreeing that Sunoco was engaged in the intrastate shipment of petroleum products and thus with the jurisdiction of the PUC. In addition, the court found the trial court was not required to consider the issue of public need, as that issue was solely within the province of the PUC.

The question of whether Sunoco is a public utility within the meaning of the Township’s Zoning Ordinance is central to this matter. If Sunoco is a public utility, only the structures themselves may be considered as to the impact and dangers posed to the surrounding community under the exemption afforded by Section 27-1722 of the Ordinance. If it is not found to be a public utility, the inquiry may be extended beyond the structures themselves, to considerations of their use. Appellants argue that the Board erred in assuming that Sunoco is a public utility without taking evidence in support of that position. They urge that this matter be remanded so that the Board may consider that issue.

Our review is indeed hampered by the Board’s failure to take evidence of and consider the factors necessary to establish whether Sunoco is a public utility entitled to the exemption under the Township’s Ordinance under Crown Communications. The considerations discussed for purposes of the power of eminent domain in Re Sunoco are not the same as those set forth by the Pennsylvania Supreme Court in Crown Communications for zoning purposes. Due to the Board’s assumption of Sunoco’s status, we have no way to determine whether their finding that Sunoco is a public utility was based on substantial evidence and whether we are to consider the effects of the structures in relation to the use of the site or the effects of only the structures themselves. For this reason, we agree that a remand is necessary for the Board to take such evidence. We also believe that the Appellants should be free to present further evidence in relation to their standing to pursue this appeal, if they deem it necessary, since they were unaware that standing would be contested until the time of the hearing before the Board.

We will issue an appropriate Order.